SEC Files Complaint Against SolarWinds: Alleged Fraud and Cybersecurity Vulnerabilities
- posted: Jan. 09, 2024
The Securities and Exchange Commission (SEC) has lodged a formal complaint against SolarWinds Corporation, as well as its Chief Information Security Officer, citing allegations of fraud and internal control lapses in connection to what the SEC alleges were known cybersecurity risks and vulnerabilities. The SEC contends that SolarWinds engaged in deceptive practices that misled investors, exaggerating its cybersecurity measures while downplaying or omitting information about recognized risks.
This legal action by the SEC represents a strong stance on enforcing securities regulations pertaining to cybersecurity, specifically targeting failures to disclose material cybersecurity risks and inadequacies in maintaining effective cybersecurity controls. Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, emphasized the gravity of the charges in a press release, stating, "Today’s enforcement action not only charges SolarWinds and Brown for misleading the investing public and failing to protect the company’s ‘crown jewel’ assets, but also underscores our message to issuers: implement strong controls calibrated to your risk environments and level with investors about known concerns."
Blowing The Whistle on Cybersecurity Violations
In the current landscape of heightened cybersecurity risks, whistleblowers play a pivotal role in safeguarding the integrity of corporate practices, especially in the realm of cybersecurity. With the increasing frequency and sophistication of cyber threats, the SEC has recognized the crucial role whistleblowers play in unearthing malpractices that could compromise not only a company's operations but also the interests of investors. The SEC whistleblower program provides further encouragement for individuals with insider knowledge of cybersecurity violations to come forward. Meant to incentivize individuals to report potential violations, including cybersecurity breaches, the SEC whistleblower awards offer compelling financial motivation for those who step forward.
The whistleblower attorneys at The Kardell Law Group have assisted professionals with knowledge of corporate wrongdoing in securing whistleblower awards. If you possess information about cybersecurity violations by your employer, reach out to us today.